ENTERPRENUERSHIP AND MANAGEMENT

1. ENTREPRENEUR
MODULE-3

2. MEANING
 An entrepreneur is one who always searches for change,
responds to it and exploits it as an opportunity-PETER
DRUCKER
 An entrepreneur is an individual who bears the risk of
operating a business in the face of uncertainty about the
future-ENCYCLOPEDIA

3. EVOLUTION OF CONCEPT
 Middle ages- person in charge of large scale production
projects.
 16th century- people organized and led military
expeditions in France.
 17th century- People bearing the risk of either profit/loss
in a fixed price contract with govt.

4. contd
 18th century- Person who is risk-taking is different from
the person who supplies capital.
 19th century- Distinct from both a financier as well as a
manager.
 20th century- An entrepreneur came to known as an
innovator and risk-taker during middle 20th century.

5. CHARACTERISTICS OF AN
ENTREPRENEUR
E – Effective Communicator
N – Negotiating skills
T – Total Commitment / Team man
R – Resourceful / responsible
E – Ethical
P – Problem solving / patience

6. contd
R – Relations-Human & public / realistic
E – Energetic / endurance
N – Networking ability
E – Excellence in Economics
U – Understands how to organize
R- Real innovator

7. CHARACTERISTICS OF AN
ENTREPRENEURSSHIP

8. CLASSIFICATION OF
ENTREPRENEUR
a) Economic Development
b) Types of business
c) Use of technology
d) Area
e) Gender & age
f)Scale of operation

9. TYPES OF ENTREPRENEUR
Stages of Economic Development
 Innovative Entrepreneur
 Imitative Entrepreneur
 Fabian Entrepreneur
 Drone Entrepreneur

10. a) Types of business
 Business Entrepreneur
 Trading Entrepreneur
 Industrial Entrepreneur
 Corporate Entrepreneur
 Agricultural Entrepreneur
 Retail Entrepreneur
 Service Entrepreneur

11. b) Use of technology
 Technical Entrepreneur
 Non-technical Entrepreneur
 Professional Entrepreneur
 High-tech Entrepreneur
 Low-tech Entrepreneur

12. c) Area
 Urban Entrepreneur
 Rural Entrepreneur

13. d) Gender & age
 Men Entrepreneur
 Women Entrepreneur
Young
Old
Middle age

14. e) Scale of operation
Small scale entrepreneur
Large scale entrepreneur

15. DIFFERENCES
ENTREPRENEUR INTRAPRENEUR
 Independent
 Full risk of business
 Himself raises necessary
capital & guarantees its
return to the suppliers
 Operates from outside
 Difficult to withdraw
from his business
 Semi-independent
 Not fully
 Neither raises the capital
himself nor guarantees any
return to supplier
 Operates within orgz
 Easier to withdraw from his
business

16. STAGES IN
ENTREPRENEURIAL PROCESS
 Stage 1 : Identification and evaluation of business
opportunity
 Stage 2 : Development of business plan
 Stage 3 : Determination of the resources required
 Stage 4 : creation & actual management of the enterprise

17. ROLE OF ENTREPRENEURS IN
ECONOMIC DEVELOPMENT
 Mobilizing the savings
 Large-scale employment
 Rural industrialization
 Reduce over-dependence on agriculture
 Encourage learning & usage of skills
 Foreign exchange

18. ENTREPRENEURSHIP IN INDIA
 Before Christ : traders & businesses men always
existed in India.
 After Christ : ‘ Kharkhanas’ & ‘ guilds ’ produced &
sold handicrafts thanks to entrepreneurship.
 18th century : British East India Company encouraged
Indian entrepreneur.

19. contd
 1947 : Socialist practices
 1960 : not much of new development
 1990 : economic liberalization, privatization &
globalization, initially pegged back the existing
entrepreneurs.
 2008 : ‘Entrepreneurship’ introduced to budding
engineers.

20. BARRIERS TO
ENTREPRENEURSHIP
a) Environmental Barriers
b) Financial Barriers
c) Personal Barriers
d) Societal Barriers

21. a) Environmental Barriers
Raw materials
Labour
Machinery
Land, building, & Infrastructure

22. b) Financial Barriers
Finance is the life-blood of any orgz
Plenty of successful small businesses

23. c) Personal Barriers
 Lack of self-confidence
 Lack of motivation
 Lack of patience
 Inability to invest in R&D & innovate

24. d) Societal Barriers
 Religious & conservative attitudes of the society can
inhibit entrepreneurs
 Added to this the communistic feelings in certain states in
India definitely kills the entrepreneurial spirit in many
Indians.

25. Identification of business
opportunities
1) Identifying ideas or opportunities for new business
ventures
2) Business opportunities can be identified by following
methods
 Watching emerging trends
 Bridging gap that exists
 Doing market survey of what people need
 Achieving technological breakthroughs with R&D
 Developing complimentary products or services for an
existing successful product
 Knowledge of government policies, incentives
 Ideas could be additive, complementary or breakthrough

26. Contd..
3) Selection of few feasible ideas among the large
number of ideas
4) Collection, compilation for and analysis of
relevant data for each business idea
5) Identifying the characteristics of each project wrt:
inputs, outputs, social cost and benefits
6) Identifying the internal and external constraints
wrt to each project ideas.

27. Project Feasibility Analysis (Project
Evaluation)
 It is the analysis of coasts and benefits of a proposed
new business project.
 It also means the appraisal of a new business idea
presented as Project report by promoters.
 Appraisal of a proposed project is called “ex-ante
analysis”
 Appraisal of a executed project is called “post-ante
analysis”

28. Reasons for Project Feasibility
Study
 When bank has to compare different proposed
projects to produce the same product and select
the best.
 When financial institute has scarce funds and has
to select a proposed project among several, even
if it’s a different product
 When an entrepreneur is looking at various
expansions plans for an already existing unit
 Even if there are no other project proposal to
compare, finance institutes routinely do project
appraisals to assess the creditworthiness of
projects.

29. Methods of project Feasibility Study
 Market Feasibility Study
 Technical Feasibility Study
 Financial Feasibility Study
 Social Feasibility Study

30. Market Feasibility Study
This is mainly used to assess the market potential
of a project.
 What would be the aggregate demand for
products as well as for spare parts in months
and years to come?
 What would be the target group for the product?
 What would be the company’s market share?
 How would competition affect the proposed
company’s market share?

31. Answers for the above questions
 Consumption trends in past, present and future.
 General performance of the industry to which the
product belongs
 Past present supply position
 Production possibilities and its constraints
 Structure of competition-national and international
 Prices of competing products
 Demand elasticity
 Consumer behavior wrt to preference, brand loyalty,
religious beliefs etc
 Distribution channels
 Administrative, technical and legal constraints.

32. Techniques used to analyze various
issues
1) Demand Forecasting Techniques
1) Judgmental Methods
1) Opinion Polls
2) Market Trails
3) Delphi Technique
4) Nominal Group Technique
2) Analytical Methods
1) Time series Methods
2) Exponential smoothing
3) Regression Method
2) Life Cycle Segmentation analysis

33. Contd..
1. Life Cycle Segmentation analysis

34. Technical Feasibility Study
 This is carried out to assess the technical details of a
project and their viability
 Is the proposed layout of site, building and plant sound?
 Are the processes chosen for production suitable?
 Are the equipments and machinery chosen appropriate?
 Is the availability of raw materials, power and other inputs
confirmed?
 are support services and auxiliary divisions in place?
 Have work schedules been drawn up realistically?
 Is the selected scale of operation optimal?
 Has there been provision for treatment of effluents made?
 Is the technology used acceptable for social benefits
point of view?

35. Answers for the questions
 Identifying technical specification of the product wrt
functional aspects, design, durability, reliability, safety
and standardization.
 Finding out the actual availability of various inputs to
production wrt both quality and quantity
 To check whether transportation facilities and other
supoorting services are available
 To check whether the manufacturing process proposed
include flow process charts.
 To check whether foreign technical knowhow is
required
 To check whether ant paten laws or intellectual
property rights are being violated

36. Financial Feasibility study
Finance is the lifeblood of organization, so this is an
important study that helps to establish the financial
viability of project.
 What is the financial requirements, fixed as well as
working capital?
 Where does money come from and what rate of
interest? What is the risk involved?
 Is the proposed project satisfy expectation wrt
returns to those who providing capital?
 Is the entrepreneur responsible for project, capable
of taking service debts and other financial burden?
Does he have enough backing?
 What is the anticipated or estimated profitability

37. Answers for the questions
 Investment outlay and costs involves in project
 The debt-equity ratio.
 Cash flow diagrams of project
 Projected future financial positions.
 Investments worthiness of the proposers.
The following techniques used in process of financial
feasibility study
 Break-even analysis
 Engineering Economy studies.
 Financial Ratio

38. Social Feasibility Study
 A project should acceptable from social point of view, in
other words the social benefits and costs.
 What natural resources of the country is the project
draining?
 What is the impact of the project on its immediate
surroundings and environment in general?
 What would be the community reactions to particular
project/product?
 Does the project displace people/ if yes? How many? What
is the compensation paid?
 What is the cost involved in restoring damages done to
environment.
 What would be the contribution of the project towards
achieving local employments. Self-sufficiency?

39. Thank
you